>Optimists retort that private-sector balance sheets look healthy,
>because the increase in debt has been more than matched by increased
>assets.
I've never understood this argument. First of all, one set of people owe, another set are owed to. People deep in debt probably don't have any assets, and people with lots of assets mostly have light debts. And second, one person's libaility is another's asset: the money I owe Chase on my checking account's line of credit is my debt and Chase's asset. Of course, assets will expand with debts - it's an accounting identity. And third, a lot of those assets are stocks, whose value can evaporate; not so debts.
Doug